Kidnap and Ransom insurance, also called kidnap, extortion, and detention insurance, is used by large corporations, NGOs and individuals to protect themselves and their families from host country threats. As we will discuss, a kidnap and ransom insurance policy does a lot more than "pay a ransom benefit to a kidnapper," but we will begin with the basics. The insurance is for people living outside their home country or traveling extensively away from their home country. Single trip coverage or week by week coverage does not exist in the market at this time.
What Does A "Good" Kidnapping Insurance Policy Cover
- It provides an insured "ransom" benefit that can be paid to secure hostage and kidnap release in a foreign country.
- It provides and extremely important consulting benefit, where in the case of a security incident or a kidnapping, a local expert is assigned to negotiate with the kidnappers. This second part, often overlooked compared to the first, is what separates a good kidnap insurance from poor ones. The response time of the consulting company and their experience in the locale can save lives and ensure successful outcomes.
Who Offers Kidnapping Insurance
Kidnap insurance: is offered by many large insurance companies. There are large quality differences among policies and one size certainly does not fit all. The other major parts of a good kidnap and ransom insurance scheme are as follows:
- Extortion Payment: demands following a specific written or verbal threat to injure, kill, or kidnap a person; damage property; contaminate products; divulge trade secrets; or destroy electronic data by computer virus. Extortion is actually much more common than kidnap itself. It’s very common for expatriates in many countries to receive some sort of threat. The threat can be a written note, an email, or a voicemail. Having someone to immediately turn to to access the validity of the threat is essential.
- Wrongful Detention: Involuntary confinement by a government entity or insurgent organization.
- Hijack: Illegal holding under duress of a person while travelling on any aircraft, motor vehicle or water vessel.
- Services of an independent international security company: In the event of one of the incidents above, only a global security company will be able to mobilize individuals trained in international executive security and kidnap and ransom.
- Policies may provide reimbursement for express kidnapping.
- Policies may provide emotional and psychological counseling after an incident.
An insurance benefit of several million dollars is really worthless without an excellent security company ready to intervene at a moments notice. A good security and kidnapping insurance policy consulting company will actually have people "on the ground" in kidnap hotspots around the world that can be "on the scene" in a matter of hours. For example, in cities such as Bogota, Mexico City, Manila, Caracas, Moscow, and Jakarta. For more remote locations, a hostage negotiator will need to be flown in from abroad.
Can Anyone Get Kidnapping Insurance
Today, it is possible for a single expatriate or global traveler to obtain a high quality kidnap and ransom insurance policy. In the past, these policies were only reserved for large corporate entities.
From a corporate perspective, sometimes a blanket and worldwide kidnap and ransom insurance policy is not needed. It is possible to secure an expatriate ransom insurance policy only for certain expatriates in select countries. This would be called a named policy vs. a blanket policy.
Necessary Kidnap & Ransom Coverage for Global Busuinesses
If a company has 25 expatriates with five each in Mexico, Germany, U.K., Russia, and China it may be unnecessary to cover the expatriates in all countries other than Mexico and Russia, where there is a definite threat of kidnap for Westerners. A global employer can take out a named expatriate ransom insurance policy on select individual employees residing in certain countries.
Of course, the disadvantage of these policies is there has to be a consistent reporting to the kidnap and ransom companies, and if a few people are left off the list, they will most likely be left without coverage in the event of an expatriate kidnapping or extortion threat against an expatriate.
If a company can afford it, a blanket policy is superior, but in many cases companies can be charged to enroll individual expatriates in countries where the risk is very low. In these economic times few companies can afford to pay for insurance not needed.